Denouement of Dean Letfus

This has been a slow train coming down the track, and I take no pleasure in recording it.

Almost a year after the wheels fell off the Shaun Stenning-Dean Letfus-Steve Goodey hyperbole machine, reality is sinking in with attendant finger-pointing and blame shifting.

As you will see if you care to follow discussion and comments here at The Paepae about Shaun Stenning, Dean Letfus and Steve Goodey and their failed NZ Property Gurus/internet marketing enterprises, claims of distance seem hollow and implausible sophistry. Well, they do to me, personally.

These guys are spruikers and their chief skill seems to have been a talent for hyperbolic sales.

– P

Massive website letdown

GREG NINNESS Last updated 10:19 18/12/2011

The collapse of Dean Letfus’ Massive Action seminar business has left scores of investors unhappy over internet marketing schemes they bought through the company.

Letfus portrayed himself as a property investment guru and promoted his seminars and consulting services through Massive Action’s website.

Letfus also promoted an internet marketing package called Snipr, telling prospective buyers they could generate a significant cash income through the scheme.

However, the expected returns failed to eventuate for many and because Massive Action has been placed in liquidation they have no way of recovering their money.

Dunedin investor Trina Burt spent nearly $20,000 building 150 websites with the Snipr package, after Letfus said during a promotional seminar she attended that each website should generate between $1 and $3 a day in advertising revenue.

That should have provided her with an income of between $1050 and $3150 a week, but the websites have generated only about $400 in total since Burt finished setting them up at the beginning of the year.

“It’s all a big mess,” she said.

Whangarei investor Julie Gordon also relied on statements by Letfus that websites set up using the Snipr package could earn $1 to $3 a day in advertising revenue when she paid Massive Action nearly $3500 for the initial software package and training and then spent thousands of dollars buying domain names and web hosting services.

She said setting up the websites was more time-consuming than she was led to believe and the promised advertising revenue was a few meagre drops rather than the expected steady stream.

She estimated she has earned about $49 in total since setting up 15 websites at the beginning of the year.

She took a claim against Massive Action to the Disputes Tribunal, seeking the return of her $3500 initial fee and the cost of the ticket to the seminar at which Letfus promoted the scheme.

In response, Massive Action said it was merely acting as an agent for another company, Chandler Operations, and the money it received was passed on to Chandler which in turn provided the software and support services.

Letfus also claimed that an email from his email address which welcomed people to the Snipr programme was bogus and sent by someone else.

However, the tribunal found that Massive Action did not provide any evidence that a company called Chandler Operations existed or that money was passed on to it. It ordered Massive Action to refund Gordon $3518.50.

Letfus last week reiterated Snipr was purchased from an offshore company and Massive Action had “no financial benefit from Snipr and holds no funds from the Snipr sales”.

Letfus said he deeply regretted his involvement with Snipr.

“I have apologised publicly repeatedly and continue to assist clients to pursue the people who took advantage of them,” he said.

On November 4, Massive Action was put into voluntary liquidation. The liquidator’s report said it is unlikely unsecured creditors would receive any money. Letfus was bankrupted on December 8 and now lists his address as Tavua, Fiji.

9 Comments »

I have been thinking – what can be done to stop the spruikers? The law seems always destined to arrive too late to stop immense damage. A few in the media expose these charlatans, but still the spruikers reappear time and again, to wreck terrible carnage on innocent people’s lives…

What can be done to stop this happening with such sickening regularity? Perhaps it is only society itself that can help stop this behaviour? Or perhaps it is our society that is partially to blame for it all?

On this point, I am reminded of The Idiot by Fyodor Dostoevsky.

The main character of The Idiot was Prince Myshkin, who was supposed to be a modern day Christ, arriving in contemporary (eighteenth century) Russia. The Prince is caring, innocent, humble, compassionate and forgiving.

In eighteenth century Russia a “positively good man” must be deluded. As such, the other characters regard the Prince as “The Idiot”. They immediately set about ripping the naive Prince off, to satisfy their lusts for amassing wealth, power and sex.

For his part, surrounded and abused by the corruption and machinations of Russian society, the innocent Prince does little more against these provocations than humbly forgiving the perpetrators. Circumstances get worse and worse. To cut a long story short, the story ends in disaster, with the Christ like Prince mentally collapsing, becoming catatonic, and being sent to a mental institution.

With typical Russian fatalism, Dostoevsky had decided that modern day Russia was too corrupt, deceitful, decadent and lacking in spirituality or morality for any Christ like figure to survive.

Sometimes, I see the rise and fall (and rebirth) of the spruikers in such terms.

Is there no hope of reversing the encroaching moral decay in contemporary New Zealand? Does anyone care? Can anything be done about it?

Hi poormastery. I haven’t read ‘The Idiot’ but will see if I can find a copy to download to my iPad and read it at the beach. Thanks for the recommendation.

On the wider question of spruikers, well, dunno. Changes to the legislation controlling financial planners – the long-time-in-gestation Financial Advisors Act – while being seen by many as locking the stable door after the horse has bolted wrt Blue Chip and the like, HAVE seen an abandonment of ‘the industry’ (vomit) of posing as an advisor while acting as a commission salesman.

Certainly, from my reading of the two Dean Leftus companies’ liquidation reports, that legislation was blamed in part for their demise … viz: “Due to changes in legislation ...” see below.

So perhaps the law is not a complete ass? (Although personally, I think the recession fulfilled its cyclical job of cleaning out cowboys and those taking shortcuts — see Mike McCombie’s sections on this in How to Survive and Prosper in a Falling Property Market. )

History & Events that Precipitated the Liquidation
The trustee was incorporated in June 2007and was the corporate trustee for the Massive Action Trust. The trust was specifically established to provide property education and seminars.

Due to changes in legislation the trustee was unable to continue operating and stopped trading at that time. The Trustee retired pre liquidation.

As the trust has no assets and liabilities that it was unable to pay the shareholders placed the trustee into liquidation.

Statement of Affairs
A statement of affairs is attached. The records for the Trust and Trustee are still being gathered and the statement of affairs is incomplete as a result.

The financial accounts for the period ending 31st March 2011 indicate that the trust has non current assets of $43,000 and non current liabilities of $85,000. The non current assets are compromised mainly of goodwill.

History & Events that Precipitated the Liquidation
The company was incorporated in January 2010. The company was specifically established to sell financial products and provide property education seminars.

Due to changes in legislation the company was unable to continue operating and stopped trading at that time.

The recession caused difficult trading conditions plus high costs of financing all of which had an impact on cash flow and profitability.

As the trust has no assets and liabilities that it was unable to pay the shareholders placed the trustee into liquidation.

Statement of Affairs
A statement of affairs is attached. The records for the Company are still being gathered and the statement of affairs is incomplete as a result.

It surprises me that Dean Letfus seems to be able to continue his ‘High cashflow low risk property’ … ‘But you need to be quick’ marketing activities directed at New Zealanders when he apparently remains a current bankrupt.

If it was as easy as the property gurus are telling, why do they need to go teaching?

The easy answer is: these gurus want to help others… Well, if you are a financially free teacher, you can afford to teach for free and select the people who do have the willpower to improve themselves, but lack the first funds.

The smart ones amongst us will say: well, these property gurus need a big group of students (fellow buyers in real terms) so they all can buy in bulk and get better pricing, of course with an extra cut for the top guru who made the deal (fair enough, especially when you are transparant about it).

So it’s all about whether you would trust your money in a person that just went bankrupt: unlike his seminar slogan “high cashflow, low risk” you will be starting off with a “high risk” when it comes to your money.